New York City Retirees’ Medicare is Under Attack

By Carol Yost

In the February issue of WestView News Dr. Alec Pruchnicki told of the federal government’s plans to privatize traditional Medicare nationwide. The process is expected to be completed by 2030. Under this Direct Contracting Entities (DCE) plan—now renamed (but not improved) to ACO REACH—insurance companies will spend about 60 percent of their funding on healthcare, and 40 percent on operating expenses, lobbying Congress, campaign donations, advertising by celebrities, and outright profit. Contrast this to traditional Medicare, which spends 98 percent of its funding on healthcare and only 2 percent on operating expenses. A pilot program based on the DCE plan is already in force in certain parts of the country.

Right now, a differently structured plan to privatize Medicare in New York City is in the works. 250,000 municipal retirees are set to lose their traditional Medicare coverage on April 1st, and unless they opt out of this arrangement—and pay a new monthly premium of $191.57, which is really a penalty for not going along with the city’s plan—they will be scooped up into a plan called Medicare Advantage Plus. This will be run by two private insurance companies: Alliance Health or BlueCross BlueShield Retiree Solutions, and Emblem Health. Like any other private insurance companies, these will keep their eyes on their profit margins, not on patient care, despite all their reassurances of providing just the same care retirees have come to expect under traditional Medicare. There are even some perks added: a SilverSneakers fitness program, 24 one-way nonemergency medical-related trips a year, and up to 56 meals per year for those with chronic conditions or post-patient discharge (or up to 14 meals per qualifying event, for a total of four such events per year).

In the insurance industry a payment of any claim is considered a loss. Besides the fact that for-profit insurance is based on spending as little as possible for care, which means that some claims are likely to be denied when insurance companies can get away with it, the first signs of trouble are that many treatments will require pre-authorization, and doctor visits to any practitioner not a member’s primary care physician will require a $15 copay. Another problem is that not all doctors or hospitals participate with Medicare Advantage plans.

Why is privatized Medicare so attractive to local and national governments? Supposedly it saves federal (taxpayers’) money; the city claims it will save over $600 million annually. The privatization conversion was worked out during a secret meeting of the Municipal Labor Committee, a group of unions representing city employees and retirees, and former Mayor de Blasio. The rank-and-file members knew nothing about it. A majority of the union leaders, numbering around 100, approved the plan, with only five unions voting against it. The unions committed to $1.3 billion in annual healthcare savings, and in return they were promised pay raises for members. Medicare Advantage plans have a system of coding to make their enrollees look sicker than they are, triggering higher federal payments for the plans. This does not mean that all of that money will be spent on health care—private insurance companies are trying to take care of their CEOs and stockholders.

Wall Street has power and appeal to politicians who look for financial support and endorsements, and the big question is: exactly how will this arrangement save federal money? In 2019, for instance, the federal government spent $321 more per person on Medicare Advantage enrollees than on those in traditional Medicare. In addition to the coding system charges, Medicare Advantage plans cover the cost of vision, dental, and hearing coverage, which traditional Medicare is not allowed to do; this encourages retirees to choose Medicare Advantage plans. Traditional Medicare should be allowed to cover those benefits.

A lawsuit has been filed to stop the New York City retirees Medicare Advantage Plus Plan. The NYC Organization of Public Service Retirees, a group organized to oppose the privatization, has succeeded in getting a temporary stay of the rollout, pushing it back from January 1st to April 1st of this year. State Supreme Court Judge Frank Lyle is expected to make a final decision on the plan in March, after the group files its toughest arguments against it.

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